Romania's Government adopted an emergency ordinance on Thursday, September 1, which prolongs the cap on electricity and natural gas prices paid by certain categories of consumers from April 1 until August 31, 2023.

The price cap applies to vulnerable household consumers as well as SMEs, companies in the food industry, and public institutions.

Energy minister Virgil Popescu said the new ordinance includes a maximum threshold of RON 1,300 per MWh that the state is willing to pay to suppliers under this compensation scheme. This is to encourage suppliers to look for cheap energy sources and discourage successive transactions to increase prices artificially.

To compensate for the cost of these schemes, the Government also adopted a new tax applied to all the players in the energy industry, including producers, traders and suppliers. This new tax, which the Government named "the contribution to the Energy Transition Fund", will neutralize the RON 1 bln budget impact of the price cap scheme, according to finance minister Adrian Câciu.

andrei@romania-insider.com

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